An individual has invested whole of the proceeds received on sale of capital asset in construction of another capital asset in the same financial year.
Sec 54f being an Exemption of Income but NOT a Deduction of Income, please suggest whether filing of Income tax return before due date is mandatory for claiming exemption under sec 54? Is it enough if we file the return of Income only when the assessing officer serves a notice in future?
Dear Krishna
Dont wait for any future notices would get raised by IT offices.
File your IT Return within due date. At the time of sale of any long term capital asset, gains r usually large and are taxed @ 20%. fill all details of sale of capital asset with indexation part . and Claim deduction under Sec. 54/54F (Again give all details of your new constrction of Long term capital assets)
Sec 54F (Sale of LTCA other than residential property) / Sec 54 (Sale of residential property) : Gain shall be exempted in Full if entire sale consideration is invested in,
1. Purchase of another / 1residential house property within 1 year before or 2 years after the date of sale of LTCA
2. Construction of a / 1residential house within 3years after the date of sale of LTCA
Regards
Tripti R Sawant
Dear Prashak... Thanks for attending my query.
So do you say that sec 54f being an exemption but not a deduction, such capital gains would not be included in Gross Total Income and so if the other incomes of the individual for the year does not exceed 2lacs, it is not mandatory for him to file ITR?
@ Krishna It is compulsory to file IT return if the gross income from salary, House, Business, Capital gains and other income exceeds 2.5 lakhs. The net taxable income can be less than 2.5 lakhs after various deductions and your tax liablility may be zero. But you must show and prove it to the IT department that there is no tax liablility. Only way you can show this is to file IT return. TDS must have been deducted u/s 194IA (immovable property) . You can claim refund on that.
In ITR -2 and 3 CG sheet is there which is compulsary
It needs to be proved to the IT authorities that income from Capital gains is zero.
ITR CG sheets mentions the word "DEDUCTIONS" under section 54 ,54B , 54F , 54EE etc
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